Denunciation of the agreement with Latvia on avoidance of double taxation

Legal Digest News
The President of the Russian Federation signed a law on the denunciation of the double taxation agreement between Russia and Latvia.

The Double taxation agreement (DTA) allows:

  • to apply preferential tax rates in terms of mandatory payments (for example, profits tax, income from sources in the Russian Federation, interest, property tax, and so on);
  • to resolve issues of disputed residency (situations in which two parties to the agreement recognize a person as their taxpayer);
  • to set off the tax paid in one state against the tax payable in another one.

However, with the entry into force of the above-mentioned Law, the DTA ceases to operate and taxes will be required to be paid at generally established rates (for example, in accordance with the DTA, interest and dividends were taxed at the rate of 5% or 10%, now - at the rates of 20% and 15%, respectively) and in some cases – from income in two states.

For tax issues related to transactions with your foreign partners, please contact Acsour experts.